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OpinionSimon Wagman
30 Oct 2018 12:08pm

What the Budget means for property

Chancellor Philip Hammond delivered his last budget before Brexit, amidst news that austerity is finally coming to an end and with an enhanced economic climate, the tax plans to reduce income tax for the lower paid can be accelerated by a year

Despite a few lesser announcements relating to property, there was little that will immediately impact the sector but plenty to impact the headlines.

Such as £5.5bn for the Housing Infrastructure Fund with an aim to support the building of 650,000 new homes; guarantees of £1bn to support SME housebuilders and new partnerships with Housing Associations in England to deliver 13,000 homes.

These, however, fail to acknowledge the cause of severe housing shortages that have lasted for many years and do not focus on the lack of suitable land and outdated planning processes at local government level. A consultation on planning is set but the outcomes are likely to be slower than needed.

Additionally, in a Budget that seeks to tax the large internet companies and retailers, there is recognition that there are severe challenges to conventional retailing and the independent shops on our high streets.

Business rates are to be cut by one-third for the next two years for all retailers in England with a rateable value of £51,000 or less – delivering an annual saving of up to £8,000 for up to 90% of all independent shops, restaurants and pubs. This coupled with “the High Street Fund” will enable local authorities to review our High Streets and create a sustainable balance of retail and residential space in tandem.

For first-time buyers purchasing shared equity homes of up to £500,000, these will be exempt from stamp duty, back-dated to the 2017 budget but will have a very small impact. Furthermore, the restriction of lettings relief from April 2020 (limited to properties where the owner is in shared occupancy) and the reduction in the period qualifying for principal private residence relief reduced from 18 months to 9 months will see an increase in Capital Gains Tax for some selling residential property - or may deter some from selling at all.

Throw in an immediate £420m to tackle potholes and relief to encourage and enhance public conveniences (enough said) and this was a limited budget for the property sector and again has failed to address the housing shortages which will still be present once Brexit has come and gone.